Congress warming to climate regulation

Committee will tackle thorny topic of caps on greenhouse-gas emissions

In February last year, the chairman of the Senate energy committee sat down
at Los Alamos National Laboratory for a private briefing on climate change.

Was global warming real, Sen. Pete Domenici wanted to know. He turned for
answers to a federal lab that he had gazed on admiringly since he was a boy.

In a barrage of computer slides, Los Alamos scientists showed the
72-year-old Republican senator a planet tipping into uncertainty. Greenhouse
gases were increasing in the atmosphere and the trapped solar radiation was
boosting temperatures worldwide, with cascading impacts on natural and human
welfare.

Natural causes alone could not explain the measured warming, the scientists
told Domenici, without the human addition of greenhouses gases, mostly from
burning fossil fuels.

``I came out of there having listened,'' Domenici later said to reporters.
``And I concluded it is enough of a problem to try to do something about
it.''

Today, Domenici and his committee host 29 corporate
executives, scientists, economists and environmentalists to discuss a
mandatory cap on greenhouse-gas emissions. It promises to be the most
serious conversation in Congress to date about dealing with climate change.

Once considered a Cassandra cry of the environmental left, concern about
global warming is drawing lawmakers into a thorny debate over how the nation
gets its energy and how much it is willing to sacrifice to avoid potentially
serious impacts.

Advertisement

If emissions and temperatures increase as high as some simulations of
future climate suggest, scientists say polar melting could raise sea levels
20 feet, flood coastal cities and halt deep ocean currents moving warmth and
marine nutrients around the globe. Storms and wildfires could become more
severe. Ecosystems and arable lands would shift, and humanity could face
significant costs adapting to a less stable world.

Trying to ease climate change through limits on greenhouse gases is a
political minefield, however. Voters could see inaction as irresponsibility
- the United States is the world's largest emitter of greenhouse gases and
the only developed country without carbon limits - yet any regulatory cap is
likely to raise the price of energy, forcing conservation and efficiency
gains but also higher costs for industry and consumers. Fossil energy is
embedded in virtually every consumer good and service, from home
construction to heat and light to plastics, steel and food.

``Carbon regulation would impact the entire economy of the United States,''
said Bryan Brendle, director of energy and resources policy for the
National Association of Manufacturers.``It would impact every aspect of
American life.''

U.S. Energy Department analysts say the various carbon regulation schemes
could add between 6 and 41 cents to the gallon price of gasoline and $91 to
$336 per year in other household energy costs by 2030. But the overall
economic impact would be small - less than a third of 1 percent drop in
gross domestic product - because Americans also would use less energy, the
federal analysts say.

The more ambitious plans call for a new U.S. market in carbon,
with permits to release greenhouse gases bought and sold or held as
investments. Carbon-based energy would become more expensive, and in theory
investment would flow to cleaner alternatives, such as nuclear power,
renewables or fossil-fuel power plants that produce hydrogen and pipe their
carbon deep underground.

By some estimates, a carbon market in the United States could be as
large as $60 billion a year, equal to adding a marketplace the size of
Bangladesh atop the U.S. economy. Depending on how permits are allocated or
auctioned, this new market will have winners and losers.

In recent years, the pot of potential losers - energy, mining,
manufacturing interests - have given two to four times as much to Republican
campaigns as to Democrats, according to figures from the Center for
Responsive Politics.

But a growing number of Republican lawmakers, at least in the Senate, are
signaling a willingness to consider some measure to contain greenhouse gas
emissions.

Sen. Lisa Murkowski, an Alaska Republican whose state is experiencing more
warming and more ecological impacts than any other, said last summer that
``there's an emerging consensus we've got to deal'' with climate change.

``The debate is about solutions,'' said Sen. Chuck Hagel, R-Neb. ``The
question we face is not whether we should take action, but what kind of
action we should take.''

With five climate bills on the table, senators are debating what sectors of
the economy should be affected and whether carbon permits should be sold to
defray the economic costs, perhaps through lower income taxes. The U.S.
House has held no major hearings in any committee of jurisdiction.

But the political landscape for climate policy in both chambers is
shifting, if slowly.

A steady rain of news reports on global warming evidence is resonating with
key constituents, including evangelical Christians, key energy and
manufacturing CEOs and a dozen states such as California and New York that
are moving toward greenhouse-gas regulation.

Retail giant Walmart, chemical manufacturer E.I. DuPont de Nemours and Co.,
General Electric and energy companies like BP, Duke Energy, Exelon, Public
Service Electric & Gas and Cinergy are cutting their carbon emissions and
say they favor some form of greenhouse-gas regulation.

Cinergy president and CEO James Rogers told a congressional committee last
summer that he became convinced that global warming is real and partly human
driven.

``But what if I and the multitude of scientists and industries agreeing
with that premise are wrong?'' Rogers said. ``We will have advanced to a
multitude of fuel sources and technological configurations that will help
move our economy into a cleaner and more self reliant future. And I don't
know anyone that can argue effectively against that outcome.''

States meanwhile are passing their own regulations and, as California
lawmakers proposed Monday, creating their own carbon markets. Energy firms
are eying this patchwork of new rules as they buy new power plants for the
next 40 years. Many prefer the certainty of unified federal regulations.

``People on the one hand want the certainty for investing in new
generation,'' said Dan Riedinger, a spokesman for the Edison Electric
Institute, an association of electric companies. On the other hand,
utilities want to keep burning abundant, cheap coal. ``Death and taxes are
certainties too,'' he said, ``and no one wants to cross that finish line.''

Still, energy-intensive industries are mindful of the prospects by 2008
dealing with a president inclined toward tougher rules. Of the leading
contenders, Sen. John McCain, R-Ariz., is pushing mandatory greenhouse gas
cuts, and Sen. Hillary Clinton, D-N.Y., has said ``holdouts'' are ``fighting
a losing battle.''

The Bush administration worked last spring and summer to dissuade the
Senate from global warming legislation, and Domenici agreed not to regulate
carbon in the energy policy act.

Despite White House pressure, a dozen Republicans made a Senate
majority in late June that declared global temperatures were rising
abnormally and that humans appeared partly to blame. The Senate backed
mandatory greenhouse-gas reductions, as long as those did not
``significantly harm'' the U.S. economy and brought other nations on board.

Domenici has said that no global warming legislation will make it
through his committee this year, and House lawmakers are at least a year
behind the Senate.

Rep. Sherwood Boehlert, a moderate New York Republican who chairs the House
Science Committee, suggests that federal regulation is inevitable, once
lawmakers heed the evidence. He led nine other House members to the South
Pole and Australia to meet scientists and see changes from global warming
first hand.

``By the end of that trip, without exception, they all said, `My eyes were
opened. I learned a lot,' '' Boehlert said.

``It's almost a member-by-member approach from those of us who are
true believers,'' he said. ``It's the tortoise and the hare. Short term, no.